At the Intersection of Dynamic Capabilities and Organizational Learning: Organizational Learning Capability as a Determinant of Innovation and Performance

Abstract

Rapid technological advancement, competition at the global level, and the requirement for innovative, administrative and productive practices (Tu et al, 2006) are forcing organizations to seek out for the creative exploitation of their distinctive capabilities deriving from their knowledge intangibles (Silvi and Cuganesan, 2006). This is a quantitative study which builds upon the intersection of dynamic capabilities view (DCV) (Winter 2003) and organizational learning (Fiol and Lyles, 1985) to highlight the role of organizational learning capability (OLC) defined as the organizational and managerial characteristics, skills or factors that facilitate the organizational learning process and allow an organization to learn (Alegre and Chiva, 2008; Jerez-Gomez et al, 2005) in the enhancement of firm innovation and performance. However, the nomological relationship among these organizational practices (i.e. OLC, product, process innovation and performance) is not empirically investigated. Although studies underline that OLC will promote product innovation (Hung et al, 2011) which in turn is documented to promote firm performance, there is little evidence regarding the relationship between OLC and process innovation specifically. Therefore this research aims at empirically investigating i-) the effect of OLC on product (i.e. the technical design, R&D, manufacturing, management and commercial activities involved in the marketing of a new or improved product) (Alegre and Chiva, 2008) and process innovation (i.e. the introduction of new elements, machinery and capital equipment which aims at improving productivity, quality, and lowering cost of production) (Damanpour, 1991; Reichstein and Salter, 2006), ii-) the direct effect of OLC on firm performance, iii-) the effect of innovation on firm performance and iv-) the effect of OLC on firm performance through the mediating role of innovation. The pertinent hypotheses developed based on the literature are analyzed through the correlation and regression analyses of the 238 surveys (collected through a research in a varied spectrum of sectors in Turkey) through the SPSS 15 software. Finally results and the managerial implications are discussed.